MH is a great choice for veg--you won't regret it.
The distance will depend on your ventilation and temperatures, but at four inches tall with everything dialed in, you can figure around 24" or so. If you want your plants more squat and the temps at the top of your plants aren't much above 80, you can go closer. The hand method works great.. if you can hold the sensitive (upper) part of your hand beneath the light at distance of, say, 16" without any discomfort, the plants will be able to handle that distance.
Since you are presumably trying the MH out for the first time, I would err on the side of caution and start higher up with your light. You can always move it down based on your results.